S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7497
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 28, 2025
                                ___________
 
 Introduced  by M. of A. PRETLOW -- read once and referred to the Commit-
   tee on Real Property Taxation
 
 AN ACT to amend the real property tax law, in relation to the payment of
   delinquent taxes; and to repeal subdivision 2 of section  962  of  the
   real property tax law relating to the qualifications of certain corpo-
   rations  or  banking  institutions  to  lend  money  pursuant  to  the
   provisions of title 4 of article 9 of the real property  tax  law  and
   section  968  of  the  real  property  tax  law  relating  to tax sale
   provisions under such title
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  findings.  The  legislature hereby finds and
 declares that many taxing jurisdictions are  owed  millions  of  dollars
 annually  in  unpaid  property taxes and that these taxing jurisdictions
 should be given the opportunity to utilize as many collection methods as
 possible in an effort to collect as much in unpaid  taxes  as  possible.
 Such uncollected taxes adversely impact the taxing jurisdictions' abili-
 ty  to meet their operating expenditures and provide for the delivery of
 necessary and essential local governmental services, amplifying the risk
 of future real property tax increases  and  negatively  impacting  those
 taxpayers  who  timely remit payment. It is hereby further declared that
 limited means exist for taxing jurisdictions to expedite the  collection
 of  such  delinquent  taxes  and  that  it  is in the public interest to
 increase the number of methods  available  to  taxing  jurisdictions  to
 expedite  such  collections  and  to  provide their constituents as many
 payment methods as possible. It is further declared that many delinquen-
 cies often remain unpaid, thereby creating a lien against  the  affected
 real property, and that the taxpayers should have alternative methods of
 making  payments  to taxing jurisdictions for the payment of their taxes
 which will in turn enable taxing jurisdictions to expedite  the  receipt
 of  anticipated revenues and provide a funding source, which will enable
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10539-01-5
              

 A. 7497                             2
 
 taxing  jurisdictions  more  effectively  to  carry  out  their   public
 purposes,  especially  at  this time when many taxing jurisdictions have
 significant budgetary problems.
   §  2.  The  title heading of title 4 of article 9 of the real property
 tax law is amended to read as follows:
 
           ACCEPTANCE OF TAXES FROM CERTAIN [LOAN CORPORATIONS]
                                 ENTITIES
 
   § 3. Section 960 of the real property tax law is amended  to  read  as
 follows:
   §  960.  Payment  of  taxes  by loan corporations.   1. Any [municipal
 corporation may] TAXING JURISDICTION OR ITS ASSIGNEE SHALL, as  provided
 in  this  title,  accept  payment of taxes, including special ad valorem
 levies and special assessments, on real property from  any  [corporation
 organized  under  the  laws  of the state of New York for the purpose of
 extending loans to taxpayers for the  payment  of  taxes]  ENTITY,  UPON
 RECEIPT  OF  AN  AFFIDAVIT  FROM A PROPERTY OWNER AUTHORIZING THE ENTITY
 MAKING THE LOAN TO PAY THE TAXES  OR  DELINQUENT  TAXES  AND  PENALTIES,
 INTEREST,  COURT COSTS OR OTHER FEES ON SUCH PROPERTY OWNER'S BEHALF AND
 CONTAINING A LEGAL DESCRIPTION OF THE PROPERTY AND  THE  STREET  ADDRESS
 THEREOF,  IF  APPLICABLE. FOR THE PURPOSES OF THIS TITLE, "ENTITY" SHALL
 MEAN ANY CORPORATION, LIMITED LIABILITY COMPANY  OR  PARTNERSHIP  REGIS-
 TERED TO DO BUSINESS IN THIS STATE.
   2.  Upon such a payment, a conditional tax receipt shall be issued and
 the amount thereof conditionally credited by the [municipal corporation]
 TAXING JURISDICTION against the taxes due  on  the  property  for  which
 payment  is  made,  but  such  payment shall not extinguish the tax lien
 existing against such property until  the  conditional  tax  receipt  is
 surrendered  for  cancellation  to  the  [municipal  corporation] TAXING
 JURISDICTION BY THE ENTITY LENDING THE MONEY TO THE TAXPAYER.  IN  ADDI-
 TION,  THE  AUTHORIZED  REPRESENTATIVE  OF THE TAXING JURISDICTION SHALL
 CERTIFY BY AFFIDAVIT THAT PAYMENT OF THE TAXES AND PENALTIES,  INTEREST,
 COURT COSTS OR OTHER FEES ON THE DESCRIBED PROPERTY HAS BEEN MADE BY THE
 LENDING ENTITY AND NOT THE PROPERTY OWNER RESPONSIBLE FOR THE PAYMENT OF
 SUCH TAXES AND THAT THE TAXING JURISDICTION'S TAX LIEN IS TRANSFERRED TO
 THE  LENDING  ENTITY  THAT PAID THE TAXES AND PENALTIES, INTEREST, COURT
 COSTS OR OTHER FEES.  THE TAXING JURISDICTION SHALL ATTACH TO THE  DOCU-
 MENT THE COLLECTOR'S SEAL OF OFFICE, IF THERE IS SUCH A SEAL, AND DELIV-
 ER THE DOCUMENT TO THE LENDING ENTITY THAT PAID THE TAXES AND PENALTIES,
 INTEREST,  COURT  COSTS  OR  OTHER FEES WITHIN THIRTY DAYS OF RECEIPT OF
 PAYMENT.  THE TAXING JURISDICTION SHALL KEEP A RECORD OF ALL  TAX  LIENS
 TRANSFERRED AS PROVIDED BY THIS SECTION.  A PROPERTY OWNER AUTHORIZING A
 LENDING ENTITY TO PAY THE TAXES IMPOSED BY A TAXING JURISDICTION ON SUCH
 PROPERTY OWNER'S REAL PROPERTY MUST FILE WITH THE TAXING JURISDICTION AN
 AFFIDAVIT  CONTAINING SUCH AUTHORIZATION, THE NAME OF THE ENTITY AUTHOR-
 IZED TO PAY THE TAXES AND PENALTIES,  INTEREST,  COURT  COSTS  OR  OTHER
 FEES,  A LEGAL DESCRIPTION OF THE PROPERTY AND THE STREET ADDRESS THERE-
 OF, IF APPLICABLE.
   3. Payments made pursuant to this section BY THE LENDING ENTITY may be
 used by the [municipal corporation]  TAXING  JURISDICTION  in  the  same
 manner as if PAYMENT WERE made directly by the taxpayer.
   §  4.  Subdivision  1  of  section 962 of the real property tax law is
 amended to read as follows:
   1. [Municipal corporations may] TAXING JURISDICTIONS OR  THEIR  ASSIG-
 NEES SHALL accept [such] payments from [a corporation] AN ENTITY extend-
 A. 7497                             3
 
 ing loans for [such] THE purpose[, if the loan corporation has a paid-up
 capital  of  at least one million dollars and charges not more than four
 per centum interest on unpaid balances on moneys loaned, nor  more  than
 two  per  centum  of  the  amount  of  the  loan  as a service charge in
 connection therewith; provided, however, that in the event of a  default
 in  the  payment of such a loan, the loan corporation may charge six per
 centum interest per annum on all sums in default. The  loan  corporation
 shall,  within  three  days after receiving the same, deposit the condi-
 tional tax receipt with a  banking  institution,  trust  company,  state
 bank,  national  bank,  or federal reserve bank of the district in which
 the municipal corporation is located]  OF PAYING  TAXES  AND  DELINQUENT
 TAXES  AND  PENALTIES,  INTEREST,  COURT  COSTS OR OTHER FEES. AN ENTITY
 MAKING A LOAN SHALL HAVE THE RIGHT TO CHARGE  REASONABLE  AND  CUSTOMARY
 LOAN  FEES  AND INTEREST, AND SUCH INTEREST SHALL NOT EXCEED THE RATE OF
 ONE AND ONE-QUARTER PERCENT PER MONTH  OR  FRACTION  THEREOF.  THE  LOAN
 DOCUMENT  SHALL PROVIDE FOR THE NOTIFICATION OF PAYMENT DUE DATES AND AN
 ACKNOWLEDGMENT BY THE BORROWER OF THE INTEREST RATE TO BE PAID, AND SUCH
 ACKNOWLEDGMENT SHALL BE SWORN TO.   THE INTEREST RATE,  IRRESPECTIVE  OF
 ANY  STATE LAW, SHALL NOT EXCEED THE RATE OF ONE AND ONE-QUARTER PERCENT
 PER MONTH OR FRACTION THEREOF.   IN CALCULATING THE  EFFECTIVE  RATE  OF
 INTEREST, ONLY THOSE FEES IN EXCESS OF TEN PERCENT OF THE FACE AMOUNT OF
 THE LOAN SHALL BE INCLUDED FOR SUCH CALCULATION.
   §  5.  Subdivision  2  of  section 962 of the real property tax law is
 REPEALED and two new subdivisions 2 and 3 are added to read as follows:
   2. TO BE ENFORCEABLE, A TAX LIEN TRANSFERRED AS  PROVIDED  BY  SECTION
 NINE  HUNDRED  SIXTY OF THIS TITLE MUST BE RECORDED IN THE OFFICE OF THE
 CLERK OR REGISTER OF EACH COUNTY IN WHICH THE PROPERTY ENCUMBERED BY THE
 LIEN IS LOCATED.
   3. AN ENTITY HOLDING A TAX LIEN TRANSFERRED  AS  PROVIDED  BY  SECTION
 NINE  HUNDRED  SIXTY  OF  THIS TITLE MAY CHARGE REASONABLE AND CUSTOMARY
 LOAN FEES AND RECOVER THE  COSTS  OF  CLOSING  THE  LOAN  AND  RECORDING
 EXPENSES  PAID  TO  ACQUIRE AND RECORD THE LIEN BY ADDING THESE COSTS TO
 THE AMOUNT OF THE LIEN.
   § 6. Section 964 of the  real  property  tax  law,  subdivision  2  as
 amended  by  chapter  733  of  the  laws  of 1959, is amended to read as
 follows:
   § 964. Deposit and delivery of conditional  tax  receipts.  1.  [Imme-
 diately  upon]  WITHIN THIRTY DAYS OF the execution of the loan contract
 between the [taxpayer] PROPERTY OWNER and  the  [loan  corporation,  the
 loan  corporation]  ENTITY MAKING THE LOAN, SUCH ENTITY shall pay to the
 [municipal corporation] TAXING JURISDICTION, OR ITS ASSIGNEE, the moneys
 provided for therein. The [taxpayer] PROPERTY OWNER shall make  payments
 on  the  loan to the [banking institution with which the conditional tax
 receipt has been deposited for the  account  of  the  loan  corporation]
 ENTITY  MAKING THE LOAN OR ITS SUCCESSOR IN INTEREST DIRECTLY OR IN SUCH
 MANNER AS DIRECTED BY THE ENTITY. THE ENTITY MAKING THE LOAN SHALL  HAVE
 THE  RIGHT TO PAY SUBSEQUENT YEARS' DELINQUENT TAXES AND ADD THESE TAXES
 TO THE ORIGINAL CONDITIONAL TAX RECEIPT. ADVANCES MADE TO PAY SUBSEQUENT
 YEARS' DELINQUENT TAXES SHALL EARN INTEREST AT THE RATE SPECIFIED IN THE
 ORIGINAL CONTRACT BETWEEN THE ENTITY MAKING THE LOAN  AND  THE  PROPERTY
 OWNER.
   2.  [When made, such payments shall be entered and acknowledged by the
 banking institution upon the  conditional  tax  receipt,  which  receipt
 shall  remain  in the possession of the banking institution until either
 the loan is fully discharged or a default occurs thereon.] In the  event
 the  loan  is  fully  discharged,  the  conditional tax receipt shall be
 A. 7497                             4
 
 endorsed "paid" and TWO  COPIES  OF  THE  CONDITIONAL  RECEIPT  ENDORSED
 "PAID"  SHALL  BE  delivered,  ONE to the [taxpayer or person making the
 payment. In the event of default, the conditional tax receipt  shall  be
 returned  to  the loan corporation at its option] PROPERTY OWNER AND ONE
 TO THE TAXING JURISDICTION THAT ISSUED THE CONDITIONAL TAX RECEIPT.
   § 7. Subdivision 1 of section 966 of the  real  property  tax  law  is
 amended to read as follows:
   1.  Upon  the  surrender of the conditional tax receipt evidencing the
 discharge of the obligation created by the loan contract  in  connection
 with  which  it was issued, the [municipal corporation] TAXING JURISDIC-
 TION shall replace it with a receipted tax bill. Such receipted tax bill
 shall bear the date of the conditional tax receipt and  no  interest  or
 penalty  shall be charged to the [taxpayer] PROPERTY OWNER BY THE TAXING
 JURISDICTION for the period between the date  of  the  issuance  of  the
 conditional  tax  receipt  and the date of its surrender. All [penalties
 and interest imposed by the municipal corporation for tax default  shall
 be  added  to the tax lien until the discharge of the obligation created
 by the loan contract  in  connection  with  which  the  conditional  tax
 receipt  was  issued, and such penalties and interest shall be cancelled
 and be deemed satisfied upon the discharge of such  obligation  provided
 such  obligation  is discharged prior to the disposition of the tax lien
 as provided in section nine hundred sixty-eight of this  chapter]  LIENS
 CREATED  AND  TRANSFERRED SHALL STAY IN EFFECT UNTIL THE LOAN OBLIGATION
 IS FULLY SATISFIED AND DISCHARGED.
   § 8. The real property tax law is amended by adding two  new  sections
 965 and 967 to read as follows:
   § 965. DEFINITIONS; APPLICABILITY. FOR THE PURPOSES OF THIS TITLE, THE
 TERM  "TAXING  JURISDICTION" INCLUDES A MUNICIPAL CORPORATION, A SPECIAL
 DISTRICT AND, WHERE  APPLICABLE,  A  COUNTY  TAX  COLLECTION  AGENCY  AS
 PROVIDED  FOR IN TITLE FOUR-A OF THIS ARTICLE. THE PROVISIONS OF SECTION
 NINE HUNDRED NINETY-SIX OF THIS ARTICLE SHALL NOT BE APPLICABLE FOR  THE
 PURPOSES OF THIS TITLE.
   §  967.  FORECLOSURE OF A CONDITIONAL TAX RECEIPT. 1. EXCEPT AS OTHER-
 WISE PROVIDED BY THIS SECTION, THE TRANSFEREE OF A TAX LIEN PURSUANT  TO
 SUBDIVISION  TWO  OF  SECTION  NINE HUNDRED SIXTY OF THIS TITLE, AND ANY
 SUCCESSOR IN INTEREST, IS SUBROGATED TO AND IS ENTITLED TO EXERCISE  ANY
 RIGHT OR REMEDY POSSESSED BY THE TRANSFERRING TAXING JURISDICTION AND IS
 ENTITLED  TO FORECLOSE THE LIEN IN THE EVENT OF A DEFAULT, AS DEFAULT IS
 DEFINED IN THE CONTRACT BETWEEN THE PARTIES, IN THE MANNER PROVIDED  FOR
 IN ARTICLE THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW FOR
 THE FORECLOSURE OF A MORTGAGE.
   2.  PRIOR  TO THE INSTITUTION OF A SUIT TO FORECLOSE A TAX LIEN TRANS-
 FERRED PURSUANT TO SUBDIVISION TWO OF SECTION NINE HUNDRED SIXTY OF THIS
 TITLE, A LENDING ENTITY SHALL PROVIDE NOTICE, VIA CERTIFIED MAIL, TO THE
 PROPERTY OWNER THAT SUCH LENDING ENTITY INTENDS TO COMMENCE  A  FORECLO-
 SURE  ACTION.  SUCH  NOTICE  SHALL PROVIDE THE PROPERTY OWNER SIXTY DAYS
 FROM RECEIPT OF SUCH NOTICE TO CURE ANY DEFAULT, AS DEFAULT  IS  DEFINED
 IN THE LOAN AGREEMENT WITH THE LENDING ENTITY.
   3.  IF  A  SUIT  TO FORECLOSE A TAX LIEN SO TRANSFERRED RESULTS IN THE
 FORECLOSURE OF SUCH LIEN, THE ENTITY FILING SUIT IS ENTITLED TO  RECOVER
 ALL  COSTS,  DISBURSEMENTS, EXPENSES AND FEES AS PROVIDED FOR IN ARTICLE
 THIRTEEN OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW FOR THE  FORE-
 CLOSURE  OF  A  MORTGAGE, THE SAME AS PROVIDED FOR IN THE CIVIL PRACTICE
 LAW AND RULES INSOFAR AS NOT COVERED BY THE REAL  PROPERTY  ACTIONS  AND
 PROCEEDINGS  LAW,  AND  ANY ADDITIONAL ALLOWANCES AUTHORIZED BY SECTIONS
 EIGHTY-THREE HUNDRED TWO AND EIGHTY-THREE HUNDRED  THREE  OF  THE  CIVIL
 A. 7497                             5
 
 PRACTICE LAW AND RULES. ANY SURPLUS MONIES REMAINING SHALL BE PAYABLE TO
 THE PROPERTY OWNER.
   4. SUBSEQUENT TO THE SALE OF THE PROPERTY AS PROVIDED IN THIS SECTION,
 THE  PROPERTY  OWNER IS ENTITLED TO REDEEM THE PROPERTY ON OR BEFORE THE
 (A) FIRST ANNIVERSARY OF THE DATE OF THE FORECLOSURE SALE BY PAYING  THE
 PURCHASER  OF THE FORECLOSED PROPERTY THE PURCHASE PRICE, PLUS COSTS AND
 INTEREST AT THE RATE OF EIGHTEEN PERCENT  PER  ANNUM,  TO  THE  DATE  OF
 REDEMPTION,  OR  ONE  HUNDRED TWENTY-FIVE PERCENT OF THE PURCHASE PRICE,
 WHICHEVER IS LESS; OR (B) SECOND ANNIVERSARY OF THE DATE OF THE FORECLO-
 SURE SALE BY PAYING THE PURCHASER THE PURCHASE  PRICE,  PLUS  COSTS  AND
 INTEREST  AT  THE  RATE  OF  EIGHTEEN  PERCENT PER ANNUM, TO THE DATE OF
 REDEMPTION, OR ONE HUNDRED FIFTY PERCENT OF THE PURCHASE PRICE, WHICHEV-
 ER IS LESS.
   § 9. Section 968 of the real property tax law is REPEALED.
   § 10. Section 970 of the real property tax law is amended to  read  as
 follows:
   §  970.  Examination of books of [loan corporations] LENDING ENTITIES.
 1. Any [municipal corporation] TAXING JURISDICTION  issuing  conditional
 tax receipts shall keep a complete record thereof. Any [municipal corpo-
 ration] TAXING JURISDICTION shall have the right to examine from time to
 time  the  [books]  DOCUMENTS  RELATING TO ANY OF THE LOANS of any [loan
 corporation] ENTITY to which it  has  issued  conditional  tax  receipts
 [and].    ANY  COUNTY IN WHICH CONDITIONAL TAX RECEIPTS ARE RECORDED may
 [make], IN ITS DISCRETION, PROMULGATE regulations not inconsistent  with
 the  provisions  of  this  title  for  the  better accomplishment of the
 purpose thereof and for the protection of the borrowing [taxpayer] PROP-
 ERTY OWNER.
   2. Upon [proof to the municipal corporation of]  A  DETERMINATION  OF,
 AFTER  NOTICE AND AN OPPORTUNITY TO BE HEARD, any willful AND PERSISTENT
 violation of this title, or of the regulations [made] PROMULGATED pursu-
 ant thereto, by any [loan corporation] LENDING ENTITY to  which  [it]  A
 TAXING  JURISDICTION has issued conditional tax receipts, it shall cease
 the issuance of conditional tax  receipts  to  such  [loan  corporation]
 LENDING ENTITY.
   §  11.  This  act  shall  take effect on the one hundred eightieth day
 after it shall have become a law.  Effective immediately, the  addition,
 amendment  and/or  repeal  of  any  rule or regulation necessary for the
 implementation of this act on its effective date are  authorized  to  be
 made and completed on or before such effective date.